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Representation: Counsel P A Walker SC with J N Bird (Applicant) C Erksine SC with K Musgrove (First Respondent) No Appearance (Second Respondent)

Solicitors Clayton Utz (Applicant) ACT Government Solicitor (First Respondent) Self-Represented (Second Respondent) File Number: SCA 5 of 2021

Decision under appeal: Court/Tribunal: ACT Civil and Administrative Tribunal Before: Presidential Member MT Daniels Member W Hawkins Date of Decision: 1 December 2020 Case Title: Australian Hotels Association (as represented by ACT Branch ABN 37 315 422 917) v ACT Planning and Land Authority & Quanton Pty Ltd ACN 167 954 994) (Administrative Review) Citation: [2020] ACAT 98

CROWE AJ:

Background

1. The applicant seeks leave pursuant to s 86(4) of the ACT Civil and Administrative Tribunal Act 2008 (ACT) (the ACAT Act) to appeal against the orders of the ACT Civil and Administrative Tribunal (the Tribunal) made on 22 December 2020. The factual circumstances leading to the making of those orders were summarised in the Tribunal’s reasons for decision (Australian Hotels Association (as represented by ACT Branch ABN 37 315 422 917) v ACT Planning and Land Authority & Quanton Pty Ltd ACN 167 954 994) (Administrative Review) [2020] ACAT 98) dated 1 December 2020 in the following terms (the reference to the “Applicant” being a reference to Australian Hotels Association (as represented by ACT Branch ABN 37 315 422 917) (the AHA) and the reference to “Authority” being a reference to the ACT Planning and Land Authority (the Authority)):

[2] Quanton Pty Ltd is the crown lessee of Block 18 Section 20 Kingston (the land). Under the Territory Plan, the land is situated in the RZ5 zone. [3] The Territory Plan provides that land in an RZ5 zone can be used for specified purposes including residential use, but cannot be used for commercial accommodation which is characterised as a prohibited development in that zone. [4] The Crown lease for the land provides that the Lessee may use the land “for the purpose of multi-unit housing of not less than three (3) and not more than fifty six (56) dwellings.” [5] The Lessee currently conducts an enterprise known as Knightsbridge Furnished Apartments (KFA) on the land. According to its website, KFA provides to members of the public, for a fee, accommodation in the nature of ‘serviced apartments’. [6] On 12 July 2019 the Applicant applied to the Authority for a controlled activity order to be directed to the Lessee in respect of the operation of KFA on the land. The Applicant said that the land was required to be used for residential purposes and was instead being used for commercial accommodation. The specified grounds for the application were three-fold: failure to comply with the crown lease; undertaking a development without approval; and constructing a building or structure without approval. [7] On 6 September 2019 the Authority gave the Lessee a notice to show cause why a controlled activity order should not be made. (Emphasis original)

2. Eventually the Authority decided not to make a controlled activity order under the Planning and Development Act 2007 (ACT) (the PDA). That resulted in an application to the Tribunal for review of the decision of the Authority by the AHA. The parties to the hearing before the Tribunal were AHA, the Authority and Quanton Pty Ltd (which, to avoid confusion, I will refer to as Quanton).

3. On 1 December 2020 the Tribunal delivered reasons for its decision that it would set aside the decision of the Authority and that it would make a controlled activity order. The formal orders were made after consultation with the parties on 22 December 2020. In substance the Tribunal set aside the decision of the Authority and made a controlled activity order. The practical effect of the latter was that Quanton should cease using the land for the purpose of serviced apartments.

4. On 20 January 2021 Quanton issued an application for leave to appeal in this Court, naming the Authority and AHA as respondents. At the same time Quanton applied for a stay of the orders made by the Tribunal. On 1 February 2021 the stay order was made by McWilliam AsJ. At the same time her Honour ordered that AHA be excused from further attendance and that the application for leave should be determined at the same time as the appeal.

5. AHA subsequently filed a notice of intention to respond in which it submitted to the orders of the Court, except as to costs.

6. In a directions hearing on 25 February 2021 the Authority was given leave to file a cross-appeal (in the context I understand this to have been an order conditional on Quanton being successful in its application for leave to appeal). In any event, on 26 February 2021 the Authority filed a notice of cross-appeal. I will address the relief sought and grounds pleaded in that notice below.

7. The application for leave and the appeal came on for hearing on 17 June 2021. Mr P Walker SC and Mr J Bird appeared for Quanton, and Mr C Erskine SC and Ms K Musgrove appeared for the Authority. As might be expected having regard to the order made on 1 February 2021 and its submitting appearance, there was no appearance for AHA.

8. I raised with counsel at the outset of the hearing my concern that there appeared to be a significant coincidence of interests between Quanton and the Authority, and that as a result there was no effective contradictor in the proceedings. I raised as a possibility the appointment by the Court of an amicus curiae. Such a course was opposed by both parties. I indicated I would embark on the hearing but that I might raise the issue again if I felt that the circumstances of the case required further consideration of it.

9. At the completion of the submissions, I determined that it would not be appropriate to further complicate the matter by taking steps to appoint an amicus.

The draft notice of appeal and notice of cross-appeal

10. The proposed notice of appeal was exhibit 4 to the affidavit of Ms L Crick affirmed on 20 January 2021. In it Quanton sought orders allowing the appeal and setting aside the orders of the Tribunal, with the restoration of the initial decision of the Authority. The grounds of the proposed appeal were:

a) that the Tribunal misconstrued the Appellant’s Crown Lease of Block 18 Section 20 Kingston by holding that Clause 3(a) of the Crown Lease require the land to be used only for a residential or predominantly residential purpose; and b) that the Tribunal misconstrued the Appellant’s Crown Lease of Block 18 Section 20 Kingston by holding that people who stay at the units at the land must do so permanently or for a "considerable time" (Par. [87]) in order for the land to be used for a residential or predominantly residential purpose (Par. [67], [87] and [89]).

11. The orders sought in the notice of cross-appeal were essentially the same as those sought by Quanton, with the addition of an alternative to the restoration of the Authority’s initial decision as follows:

…that the matter be remitted to the ACAT for redetermination according to law.

12. The grounds of the cross-appeal were:

a. the ACT Civil and Administrative Tribunal erred finding that the Crown Lease over Block 18 Section 20 Kingston Act (“Crown Lease”) is ambiguous; b. the ACT Civil and Administrative Tribunal erred in using the Territory Plan to interpret the Crown Lease; c. the ACT Civil and Administrative Tribunal erred in inferring and inserting the term ‘residential’ into the Crown Lease; d. the ACT Civil and Administrative Tribunal erred in not understanding the significant and legal ramifications of the Crown Lease being a registered lease on the Land Titles register; e. to the extent that the ACT Civil and Administrative Tribunal found that the Crown [L]ease was a statutory instrument and ss 138 and 139 of the Legislation Act 2001 (ACT) applied to the interpretation of the lease, the Tribunal erred; f. the ACT Civil and Administrative Tribunal erred in interpreting the Crown Lease as limited to permitting residential uses; g. the ACT Civil and Administrative Tribunal erred in not considering the definition of Class 2 buildings in the Crown Lease; h. the ACT Civil and Administrative Tribunal erred in determining that the Applicant was in breach of the Crown Lease; i. in the alternative to (h), the ACT Civil and Administrative Tribunal erred in determining that it had sufficient evidence to make a determination that the Applicant was in breach of the Crown Lease; j. the ACT Civil and Administrative Tribunal erred in determining that a controlled activity within the meaning of s 339 of the Planning and Development Act 2007 (ACT) had been undertaken by the Applicant. (Emphasis original)

The active role of the Authority in this Court

13. The Authority took an active role before the Tribunal to supporting its initial decision. It also took such a role in the challenge to the decision of the Tribunal in this Court. In submissions counsel sought to distinguish the decision in R v Hardiman; Ex Parte Australian Broadcasting Tribunal (1980) 144 CLR 13 (Hardiman). The Authority relied on the decision of the Victorian Court of Appeal in Macedon Ranges Shire Council v Romsey Hotel Pty Ltd [2008] VSCA 45; 19 VR 422 (Macedon Ranges case) to distinguish the situation here from the judicial review proceedings in Hardiman.

14. In the Macedon Ranges case the Court (Warren CJ, Maxwell P and Osborn AJA) said:

[34] What was said by the High Court in R v Hardiman; Ex parte Australian Broadcasting Tribunal (‘Hardiman’s case’) did not concern administrative review proceedings before a tribunal like VCAT. Rather it concerned the quite different position of a decision-maker whose decision is the subject of judicial review proceedings. Such proceedings are to be distinguished from ‘merits review’ proceedings before the Tribunal in two important respects. First, judicial review is concerned with error of law. There is no room for debate about the merits of the decision under challenge. Secondly, if the decision under review is found to be vitiated by error of law, the ordinary course is for the decision to be quashed and the matter remitted to the primary decision-maker, which must then carry out the decision-making process afresh in accordance with the legal ruling of the court. Hence the importance of the decision-maker preserving its impartiality. ... [37] An administrative review proceeding, by contrast, is concerned with the merits of the primary decision. As we have pointed out, the primary decision-maker is uniquely well-placed to assist the Tribunal in its consideration of the merits. Secondly, the primary decision-maker is seldom called upon to carry out the decision-making process afresh. The Tribunal stands in the shoes of the primary decision-maker and decides what is the “correct or preferable decision” on the material before it. The decision made by the Tribunal then becomes, for all purposes, the decision of the primary decision-maker. [38] Davies J, as President of the Commonwealth Administrative Appeals Tribunal, drew these same distinctions in New Broadcasting Ltd v Australian Broadcasting Tribunal. In contradistinction to Hardiman’s case, that case involved merits review of a decision of the Broadcasting Tribunal. His Honour said that in a proceeding before the [AAT (Cth)]– … it is not unusual for the representative of the decision-maker to play an active role in examining and cross-examining witnesses and to put substantive arguments. That is indeed the normal and desirable course. [39] For these reasons, in our view, the Commission could – and should – have played an active role in the review proceeding. The Commission should have sought to support its own decision by reference to the material which it considered to be significant, and by reference to the statutory regime under the GR Act which it administers. (Footnotes omitted)

15. In my view the distinction drawn in the Macedon Ranges case was pertinent to the situation here. Having regard to the circumstances of this litigation, and the part played by the Authority before the Tribunal it was appropriate for the Authority to adopt the role which it did in the proceedings before me. Overall I found the submissions made on its behalf to be of assistance.

Need for leave to appeal

16. The right of a party to a Tribunal decision to appeal to this Court is governed by s 86 of the ACAT Act. Pursuant to that section, because the matter related to a decision made under the PDA, the parties in the matter before the Tribunal were entitled to seek leave to appeal on a question of law: see ss 86(2) and (4).

17. The principles applying to the application for leave were set out by McWilliam AsJ in Bailey v Bottrill [2019] ACTSC 45 at [8]. The situation here is a little different from that confronting her Honour in that case. Here because the leave and the substantive appeal are being heard together it will be necessary for the Court to determine whether the Tribunal did fall into errors of law as asserted in the draft notice of appeal and the cross-appeal. The determination of the application for leave will have to be made in that context.

Controlled activity order

18. Such orders may be made pursuant to the provisions of pt 11.3 of the PDA. Relevantly for current purposes such an order may be made by the Authority to require a crown lessee to comply with a lease provision: see PDA s 358(3)(c). An order might also be made to require a crown lessee not to carry out development for which development approval is required without such an approval: see PDA s 358(3)(b). Once a person to whom it is directed is given notice of a controlled activity order it is a strict liability offence to contravene that order: see PDA s 361. The questions of law

Did the Tribunal err in construing the Crown Lease

Decision of the Tribunal on this issue

19. The terms of the purposes clause in the Crown Lease are set out in paragraph [4] of the Tribunal’s reasons for decision which is extracted in [1] above. There is also an interpretation clause which is relevant. It provides as follows:

INTERPRETATION 1. IN THIS LEASE unless contrary intention appears: (a) “Authority” means the Planning and Land Authority established by section 10 of the Planning and Development Act 2007; (b) “building” means any building or structure constructed or partially constructed or to be constructed, as the context permits or requires, on or under the land; (c) “class” for a building or structure, means the class of building or structure under the building code as defined in the Building Act 2004; (d) “dual occupancy housing” means the use of land that was originally used or leased for the purposes of single dwelling houses for two dwellings; (e) “dwelling”: (i) means a class 1 building, or a self-contained part of a class 2 building that: (A) includes the following that are accessible from within the building, or the self-contained part of the building: (1) not more than 2 kitchens; (2) at least 1 bath or shower; (3) at least 1 toilet pan; and (b) does not have access from another building that is either a class 1 building or the self-contained part of a class 2 building; and (ii) includes any ancillary parts of the building and any class 10a buildings associated with the building; (f) “Lessee” shall: (i) where the Lessee consists of one person be deemed to include the Lessee and the executors administrators and assigns of the Lessee; (ii) where the Lessee consists of two or more persons be deemed to include in the case of a tenancy in common the said persons and each of them and their and each of their executors administrators and assigns and in the case of a joint tenancy be deemed to include the said persons and each of them and their and each of their assigns and the executors administrators and assigns of the survivor of them; and (iii) where the Lessee is a corporation be deemed to include such corporation its successors and assigns; (g) “multi-unit housing” means the use of land for more than one dwelling and includes but is not limited to dual occupancy housing; (h) “premises” means the land and any building or other improvements on the land; (i) “Territory” means: (i) when used in a geographical sense the Australian Capital Territory; and (ii) when used in any other sense the body politic established by section 7 of the Australian Capital Territory (Self-Government) Act 1988 (C’th); (j) words in the singular include the plural and vice versa; (k) words importing one gender include the other genders; (l) a reference in this lease to any statute or statutory provision shall include a reference to any statute or statutory provision that amends, extends, consolidates or replaces the statute or statutory provision and to any other regulation, instrument or other subordinate legislation made under the statute. (Emphasis original)

20. After referring to the purposes clause and the definitions in clause 1 which it saw as relevant the Tribunal said:

[26] The above definitions are in the same terms as used in the Territory Plan. However, the Territory Plan is a visually hierarchical document. It locates the term ‘multi-unit housing’ under the umbrella term ‘residential use’. The term ‘residential use’ is distinct from the term ‘commercial accommodation use’ which is itself an umbrella term under which activities such as hotels, motels and serviced apartments are located. The terms ‘residential use’ and ‘commercial accommodation use’ are presented in the Territory Plan as separate concepts that do not intersect or overlap. [27] The Applicant submitted that the Crown lease should be read consistently with the Territory Plan, such that the term ‘multi-unit housing’ in Clause 3(a) would bring with it the connotation of, and limitation to, ‘residential use’. [28] The Authority and the Lessee both approached the matter on the basis that in interpreting the Crown lease the Territory Plan should not be referred to at all, and neither should the history of the granting of the Crown lease. [29] The Authority and Lessee submitted that the correct approach was that the Crown lease should be interpreted as a contract, simply applying the ordinary meaning of the words used in the document. However, both submitted that due to its special status in the Torrens title system as a public document on which third parties rely, the rules of contractual construction permitting reference to extrinsic material could not be applied. In particular, the Lessee urged that extrinsic material such as the Territory Plan could be referred to in order to clarify ambiguity in the Crown lease, but not to import ambiguity. The Authority and Lessee submitted that the Tribunal was bound by previous authorities to take this approach.

21. The Tribunal then went on to explore the issue of whether the Crown Lease was a “statutory instrument” for the purposes of the Legislation Act 2001 (ACT) (Legislation Act). It certainly appears that the Tribunal was attracted by the proposition that the Lease was such an instrument (see its reasons at [33]–[41]). However, ultimately the Tribunal did not make a clear decision on the issue. At [48]–[49] the Tribunal said:

[48] In the end, in this case, nothing turns upon the distinction between contractual construction and statutory interpretation. This is because we are satisfied that whether viewed as a contract or a statutory instrument, or perhaps a hybrid of the two, in relation to this Crown lease regard must be had to the Territory Plan. [49] Adopting the contractual construction approach, it is by no means clear that the cases to which we were referred stand for the proposition that the Territory Plan cannot be referred to in the initial construction of a Crown lease. Even without ambiguity or deficiencies in a contract, ordinary principles of contractual construction permit consideration of the objectively ascertainable ‘surrounding circumstances’ within which the contract was formed. The ‘extrinsic material’ referred to in the authorities cited on behalf of the Authority and the Lessee is most commonly evidence of the subjective intentions or understanding of the parties to the contract. Although extrinsic to the Crown lease document, we do not see the provisions of the Territory Plan in relation to the subject land at the time of the grant of the Crown lease, as falling within the same category as evidence of the subjective intention of the parties. (Footnotes omitted)

22. The Tribunal proceeded to consider the cases of Westfield Management Ltd v Perpetual Trustee Company Ltd [2007] HCA 45; 233 CLR 528 (Westfield), Springrange Pty Ltd v Australian Capital Territory [2010] ACTCA 17; 177 LGERA 125 (Springrange appeal decision), Barton Property Partnership No 2 v Foote (No 2) [2015] ACTSC 204 (Barton) and Supabarn Supermarkets Pty Ltd v Cotrell Pty Ltd (No 3) [2020] ACTSC 53 (Supabarn). In relation to the latter case the Tribunal saw itself as applying the analysis of Penfold J:

[54] Most recently in Supabarn, the Court was required to determine whether certain clauses in a registered lease had been breached. Her Honour Penfold J undertook a comprehensive review of the cases covering principles for interpretation of contracts generally, commercial contracts, and documents registrable in the Torrens title system and concluded: Having regard to the cases and submissions mentioned above, I propose to deal with the construction of the Lease, being an agreement that creates an interest in land and is registered on a Torrens title register, on the basis that: (a) Westfield constrains, but does not entirely exclude, the use of extrinsic materials in construing the terms of such an agreement; (b) the Westfield restrictions on the use of extrinsic materials are not only applicable to the construction of those provisions of an agreement that, if the agreement is registered, have the quality of indefeasibility, because the basis of the restrictions is not indefeasibility as such but the “inherent probabilities of what inquiries a purchaser of the benefit” of the registered agreement is likely to make (Phoenix); (c) the circumstances relevant to whether extrinsic materials may be taken into account include the intended lifespan of the agreement and whether the agreement contemplates the assignment of a party’s rights under the agreement during that lifespan (Phoenix); (d) the extrinsic matters that may be considered in construing a registered agreement are limited to “ones that one can know without evidence from outside the terms of the document itself”, also described as “background knowledge that is accessible to all the people who it is reasonably foreseeable might, in the future, need to construe the document” (Phoenix), including: (i) material identifying the parties, the land subject to the agreement, and “the physical characteristics of the tenements” (Springrange; Sertari); (ii) material used to explain the meaning (denotation) of non-legal technical terms used in the agreement, for instance surveying terms and abbreviations appearing on the deposited plan, which material may include dictionary definitions, applicable legislative provisions, and possibly previous judicial consideration of the terms in question (Prowse v Johnstone; Currumbin Investments); (iii) an unregistered instrument, or other information, which is explicitly incorporated into a registered instrument by reference, or to which attention is directed by a term of the registered instrument properly construed, at least if the document or information was and remains publicly available to third parties without unreasonable effort, expense or delay (Currumbin Investments; Suhr). [55] While her Honour did not specifically list the Territory Plan amongst the extrinsic material to which regard might be had, it clearly falls within the category of ‘extrinsic matters’ referenced in subparagraph (d)(i). The objective and publicly accessible nature of the Territory Plan is demonstrated by the simple distinction that a party does not lead evidence of the terms of the Territory Plan, it is not a matter for proof but a matter for submissions.

23. The Tribunal did not see anything in the decisions referred to in [22] above as precluding it from construing the Crown Lease by reference to the contents of the Territory Plan 2008 (ACT) (the Territory Plan). It said:

[58] The decision in Supabarn we think crystallises the current thinking about the meaning of Westfield and Codelfa. After reviewing the authorities in the light of later judicial reflection, we are satisfied that for a Crown lease issued under the PDA the surrounding circumstances that may be considered as context to give meaning to the Crown lease include the location of the land, and the provisions of the Territory Plan in force at the time of the grant. [59] Even if we are wrong in our conclusion that the Territory Plan forms part of the surrounding circumstances for all Crown leases in the ACT, it is inevitable that recourse must be had to the Territory Plan to understand the meaning of this particular Crown lease. This is so, whether a statutory interpretation or contractual construction approach is taken. [60] Both approaches favour an interpretation of the Crown lease which is workable – whether this be called giving business/commercial efficacy to a contract or avoiding an absurd result of interpretation of legislation. In Springrange the Court of Appeal found it was not necessary to look outside the terms of the Crown lease (as the Court below had done) because “it seems to us that the lease, interpreted in the abstract, has a clear and rational operation”. We do not think that the Crown lease under consideration in this matter could be so described. (Footnotes omitted)

24. The Tribunal then explained its conclusion as to what it saw as a defect in the purposes clause:

[61] As written, the Crown lease allows no activity to be undertaken on the land other than the construction of buildings. This is because the definition of ‘multi-unit housing’ and associated terms in the Crown lease are closed categories, and refer only to the construction of buildings of a certain type. The Crown lease expressly gives permission to construct buildings on the land. The Crown lease does not expressly grant permission to the crown lessee to conduct any activities in the buildings as constructed.

25. In expressing that opinion the Tribunal referred to the decision in Capital Recycling Solutions Pty Ltd v Planning and Land Authority of the ACT [2019] ACTSC 58; 347 FLR 1 (Capital Recycling case).

26. The Tribunal noted the absurdity of a purposes clause which permitted the construction, but not the use, of buildings on the land (see [62]). It also pointed out the absurdity of construing the clause to permit any use which might be physically possible having regard to the nature of the buildings constructed on the land (see [64]-[65]). In the light of these comments the Tribunal concluded:

[66] A third alternative, and the middle road between these two extreme constructions, would be to interpret the word ‘multi-unit housing’ in the Crown lease by reference to the hierarchy of terms contained in the Territory Plan. As outlined above, we think this is permissible at the outset as reference to an objectively available ‘surrounding circumstance’. It might also be considered, in the context of the planning regime in the ACT, to be a technical legal term which brings with it the meaning the term bears in the planning context. Support for this approach is enhanced where, as here, the definitions used in the Crown lease are identical to those occurring in the regulatory scheme. In any event, there can be no question that the legislative scheme within which the parties were contracting may be referred to in order to give business or commercial efficacy to a contract which appears on its face to irrational. [67] As previously noted, in the legislative scheme ‘multi-unit housing’ falls within the umbrella term ‘residential use’. By reference to this legal context, ‘multi-unit housing’ connotes and thus imports the concept of ‘residential use’ into clause 3(a) of the Crown lease, permitting the land and buildings to be used for that purpose. We are comfortably satisfied that an objective bystander apprised with knowledge of the location of the land and the planning scheme in force at the time of the grant, would interpret the Crown lease to include permission for residential use of the multi-unit housing.

Submissions of Quanton

27. Mr Walker SC argued that the purposes clause in the Crown Lease had a plain meaning. It clearly extended to both the construction of multi-unit housing and the use of such building for the purpose of multi-unit housing. There was no ambiguity and thus no need to look beyond the terms of the lease itself to work out what was meant by that clause. He relied on the High Court cases of Codelfa Constructions Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 352 and Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; 256 CLR 104 at [48], [49] and [52] in support of that proposition.

28. It was further submitted for Quanton that the fact that the Crown Lease was a registered document of title provided a strong basis for confining the construction process to the terms of the document itself. Quanton relied upon Westfield, Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council [2010] NSWCA 64, the Springrange appeal decision, Barton and Deguisa v Lynn [2020] HCA 39; 94 ALJR 1020 in that regard.

29. It was suggested that the conclusion of the Tribunal in relation to Supabarn (see [22] above) is erroneous. The Tribunal referred to subparagraph d(i) of the extract from the judgment of Penfold J as warranting taking the Territory Plan into account. However, nothing in the Plan identified the parties, the land the subject to the agreement or the “physical characteristics of the tenements”. The reliance on d(i) was thus misconceived.

30. Indeed, Quanton submitted that the Territory Plan had no operation in relation to the use of the land once the Crown Lease was granted and registered. Reference was made to s 50 of the PDA which provides:

Effect of territory plan 50. The Territory, the Executive, a Minister or a territory authority must not do any act, or approve the doing of an act, that is inconsistent with the territory plan.

31. Mr Walker SC pointed out that the section says nothing about what a Crown Lessee might do, or not do. Section 50 applies as a constraint upon administrative decision makers. It has no operation with respect to the use of land pursuant to a registered Crown Lease. Insofar as Master Harper suggested in Springrange Pty Ltd v Australian Capital Territory [2009] ACTSC 18 at [22] that the Crown Lease should be “interpreted consistently” with the Plan, that suggestion did not accord with the authorities referred to in [27] and [28] above and should not be followed.

32. Two further reasons were given for not following that approach. Firstly, to do so would undermine the certainty given by the contents of the Lease document. The Territory Plan is expressed in vague terms reflecting matters of general policy. Also, it can be changed at any time, unlike a Crown lease which is usually granted for a period of 99 years. Moreover, there would be no utility in including definitions in the lease if it were intended that the definitions contained in the Territory Plan should apply.

33. The second reason arose from the proposition that the Territory Plan could not be used to “read down” a registered Torrens Title lease. Quanton relied on Breskvar v Wall (1971) 126 CLR 376 and Canberra Tradesman’s Union Club Inc v Commissioner for Land Planning (1998) 100 LGERA 267 for the proposition that even where the purposes clause in a lease was inconsistent with the Plan once it was registered under the Land Titles Act 1925 (ACT) it has full force and effect notwithstanding any legal anomaly in registering the lease.

Submissions of the Authority

34. The Authority pointed to the term of the Crown Lease and the width of the word “use” in several places in the document as providing clear indications that the word comprehended the long term use of the land. It would make no sense for the word to be confined to the construction of the “multi-unit housing”. The purposes clause comprehended both the construction of such housing and the use of the building so constructed for such housing.

35. Support for this submission was to be found in the reference in the definition of “dwelling” in the Crown Lease to classes of buildings. That picked up the building classes referred to in the Building Code of Australia (the BCA) via the Building Act 2004 (ACT). The Authority referred to the discussion in Genco v Salter [2013] VSCA 365; 46 VR 507 (Genco) as demonstrating the link between the ongoing use of a building and the correct classification of that building under the BCA. The definition of “class” in the Crown Lease was said to emphasise the ongoing nature of the use once the building(s) had been constructed on the land.

36. Mr Erskine SC argued that having regard to the above it followed that the Tribunal had fallen into error in finding that the text of the purposes clause in the Crown Lease comprehended only the construction of multi-unit housing. It was further submitted that even if the Tribunal had been correct in its interpretation that did not lead to the conclusion that the Crown Lease was “absurd, uncommercial of impractical”. There was no statutory requirement for ongoing use to be specified in a Crown lease nor is it an essential element for a lease at common law. Thus, there was no justification for reference to extrinsic materials.

37. This proposition was reinforced by reference to the principles applying to the interpretation of contracts. The Authority relied on the approach taken in HDI Global Specialty SE v Wonkana No 3 Pty Ltd [2020] NSWCA 296 to support the following statement of those principles:

(a) The interpretation of commercial documents involves an objective appraisal of the text that has been used.

(b) While it is permissible to consider the context of the document, that occurs only to give context to the words actually used. It does not involve a subjective appraisal of what the document should have said. (c) Correcting mistakes in the document is confined to correcting errors of expression, not errors of intention.

(d) The error of expression must be manifest.

(e) An interpretation is not absurd or incapable of being upheld, merely because it is uncommercial or sub- optimal.

38. The Authority argued that even if regard could be had to the Territory Plan as a background document (contrary to the view of Mossop J at [54] of Barton) the Tribunal went too far in actually inserting the limitation of residential use into the Crown Lease when there was no justification under the orthodox principles of interpretation of contractual documents for doing so.

39. In relation to the statutory instrument issue the Authority pointed to the rejection by the Tribunal of the dicta of Mossop J in Barton on the basis that the proposition that the issue had not been raised before his Honour. Although the conclusion of the Tribunal on the issue was not clear, it was submitted that it was implicit in the Tribunal’s reasoning that it did accept that the Crown Lease was a statutory instrument. This was said to underpin the use by the Tribunal of principles of statutory interpretation to read words into the Crown Lease.

40. The written submissions of counsel for the Authority refer in considerable detail to the history of leasehold and interpretative legislation in the Territory to support the following propositions:

(a) At no point either historically, or at present, has the legislation authorising the granting of Crown leases materially altered their status as leases at common law.

(b) At all times, Crown leases issued in the Territory have been required to be registered under the Torrens legislation applicable in the ACT.

(c) It was not until 1981 that interpretation legislation had any provisions dealing with the approach to interpreting legislation generally (specifically the introduction of s 15AA to Acts Interpretation Act 1901 (Cth) which was re-enacted in different language but to the same effect in ss 138 and 139 of the Legislation Act.)

41. The Authority also referred to the decision in Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 (Defence Housing Authority case) as supporting the distinction between the legislation authorising a statutory body to enter into commercial transactions and the regulation of particular transactions made pursuant to that authority. Unless the authorising legislation made it clear that the residential lease in question in that case should be regulated otherwise it was subject to the laws of NSW which applied to such leases made in that State.

42. A similar point was made in reliance on Griffith University v Tang [2005] HCA 7; 221 CLR 99 (Tang) in relation to the distinction between a decision made pursuant to rules made by the University Council, which it was authorised to do under the Act establishing the University, and a decision under the enactment itself.

43. In this case the relevant land, not being national land, is to be managed by the ACT Executive under s 29 of the Australian Capital Territory (Planning and Land Management) Act 1989 (Cth). Section 237 of the PDA authorises the Authority, on behalf of the Executive, to grant Crown leases. Chapter 9 of the PDA deals with a wide range of matters ancillary to the granting of Crown leases. However, there is nothing in the PDA relevantly altering the fundamental character of a Crown lease as a lease made under the common law. As in the Defence Housing Authority case and Tang, the Crown lease was not entered into “under” the PDA. While the Authority might be authorised to grant such a lease under the PDA the force and effect of the lease arises from the nature of the transaction itself.

44. The Authority argued that the distinction drawn by the Tribunal at [35] of its reasons for decision between the situation here and the reasoning in the Defence Housing Authority case and Tang was erroneous. Insofar as the Tribunal relied upon a finding that the Crown Lease was a statutory instrument, that finding constituted an error of law.

45. The Authority also made submissions to similar effect as those of Quanton summarised in [28] and [29] above.

Consideration

46. The words used in cl 3(a) of the Crown Lease clearly created some uncertainty as to meaning as a result of the precise definitions used in cl 1. If there was no definition of “multi-unit housing” or “dwelling” it would be perfectly clear that the parties intended that the lessee could use the land only for the purposes of building multi-unit housing, and persons living in the housing so constructed (or in such housing if it existed at the time of the grant of the lease).

47. The somewhat circular definition of “multi-unit housing” directs attention to the use of the land for more than one “dwelling” (the reference to dual occupancy also picks up a definition which refers to “dwelling”). When regard is had to cl 1(e) of “dwelling”, it can be seen that it is defined to mean a building of a certain class under the BCA. Presumably it was this chain of definitions which led the Tribunal to the conclusion which it expressed at [61] of its reasons for decision (see [24] above). As the Tribunal noted (at [62]), the conclusion that the purposes clause permitted only the construction of the building meeting the description supplied by the definitions would lead to a result which was “absurd, and irrational and would not make any commercial sense.” Indeed, such a construction would effectively make a nonsense of a lease which was granted for 99 years and which contemplated that the land would be used for human habitation of some kind on an ongoing basis (see cls 3(d), (e), (h) and (j)).

48. In that context it is necessary to closely track through the words in the lease to avoid, if possible, a construction which would rob the document of commercial sense.

49. If the word “dwelling” in the definition at cl 1(g) is substituted by the definition at cl 1(e) the former becomes (leaving aside the reference to a class 10a buildings):

“multi-unit housing” means the use of land for more than one class 1 building, or a self-contained part of a class 2 building, that [has the characteristics in (A) and (B)] (Emphasis added)

50. It will be noted that the term “building” is also defined at cl 1(b) to include existing structures as well as those to be constructed. It seems likely that the lease document was adapted from a template document which was not particularly well customised for the particular circumstances of the intended lease of the land in question (as to which see per Gray P and Penfold J in the Springrange appeal decision at [17]–[18]). Be that as it may it would make even less sense of the lease if cl 3(a) was to be limited to the construction of a building on the land where the language of the document suggested the possibility of an existing building which, impliedly at least, was a class 1 or 2 building under the BCA.

51. It is apparent that the references to the BCA incorporate the classifications made under that document as in force at the date of the grant of the lease, which was 22 July 2015. Under pt A3 of the BCA at that time classes 1, 2 and 10a were described in the following terms:

Class 1: one or more buildings which in association constitute— (a) Class 1a — a single dwelling being— (i) a detached house; or (ii) one of a group of two or more attached dwellings, each being a building, separated by a fire-resisting wall, including a row house, terrace house, town house or villa unit; or (b) Class 1b — (i) a boarding house, guest house, hostel or the like— (A) with a total area of all floors not exceeding 300 m2 measured over the enclosing walls of the Class 1b; and (B) in which not more than 12 persons would ordinarily be resident, (ii) 4 or more single dwellings located on one allotment and used for short-term holiday accommodation, which is not located above or below another dwelling or another Class of building other than a private garage. Class 2: a building containing 2 or more sole-occupancy units each being a separate dwelling. … Class 10: a non-habitable building or structure— (a) Class 10a — a non-habitable building being a private garage, carport, shed, or the like; or …

52. The definition of sole-occupancy unit in pt A1 of the BCA is as follows:

Sole-occupancy unit means a room or other part of a building for occupation by one or joint owner, lessee, tenant, or other occupier to the exclusion of any other owner, lessee, tenant, or other occupier and includes— (a) a dwelling; (b) a room or suite of rooms in a Class 3 building which includes sleeping facilities; or …

53. There are further definitions of sole-occupancy unit referring to rooms or suites within classes of building other than classes 1 and 2. They are not relevant for current purposes, except for that referring to class 3.

54. By reference to these descriptions, it can be seen that the expanded definition of “multi-unit housing” in cl 1(e) could be further expanded to read as follows:

the use of land for more than one detached house or a group of two or more attached dwellings (etc) or boarding houses, guest houses, hostels or the like (etc) or more than one self-contained parts of a building containing sole occupancy units each being a separate dwelling (etc)… (Emphasis added)

55. Because the words picked up from the BCA must carry the meanings which they have in that document (there being no suggestion in the Crown Lease otherwise) the references to “house” and “dwelling” carry the ordinary meaning of each word, in the BCA context, not limited by the somewhat artificial logic of the definitions in the Crown Lease. It follows that by the incorporation of the BCA classes the definition of “multi-unit housing” does in fact pick up the use of the buildings erected or to be erected on the land for housing and/or dwellings. That plainly includes the ongoing use for that purpose during the term of the lease.

56. In this way it seems to me that, contrary to the conclusion of the Tribunal, cl 3(a) does permit the use of the land for the construction of a building containing between three and 56 sole occupancy units, and the use of those units as dwellings for human habitation.

57. Because it was possible to make commercial sense of the lease from the words used in it (including those incorporated via the BCA) there was thus no need or justification for the Tribunal to resort to the Territory Plan to import the words “residential use”. It erred in law in so doing.

58. For completeness I should say that I could see nothing in the decision of McWilliam AsJ in the Capital Recycling case which is inconsistent with the analysis I have undertaken above.

59. I will briefly address the submissions of the parties in relation to whether the Tribunal was bound by authority not to construe the lease by reference to the Territory Plan, and as to whether the lease was a statutory instrument pursuant to the Legislation Act.

60. If it be assumed that the words in the lease created an ambiguity in the meaning of the lease which could not be resolved by the express words used in the document itself the decisions relied upon by the parties (see [28] above) did preclude the Tribunal from construing the lease by reference to the Territory Plan. Penfold J carefully reviewed the authorities in her judgment in Supabarn. The product of that review appears at [54] of the Tribunal’s decision which is extracted in [22] above. The accuracy of her Honour’s conclusions was not questioned in the appeal in Supabarn (see Supaban Supermarkets Pty Ltd v Cotrell Pty Ltd [2021] ACTCA 2). I adopt her Honour’s formulation as a correct statement of the current law in relation to the construction of Torrens title registered leases.

61. I accept the submission of the parties that the Tribunal erred in concluding that the Territory Plan fell into the category of exceptions described at d(i) of the judgment of Penfold J. Indeed, the Territory Plan so obviously does not fall within that category I wonder whether the Tribunal meant to refer to d(ii) or d(iii). It is difficult to know. The opening words of paragraph d in her Honour’s judgment mean that the last sentence of [55] of the Tribunal’s judgment does not clarify the matter.

62. Either way, the difficulty with the approach taken by the Tribunal is that there is nothing in the Crown Lease itself, or in the PDA, which directs attention to the Territory Plan when considering the meaning of cl 3(a). On the contrary, the key terms used are specifically defined without reference to the Territory Plan in cl 1 of the Crown Lease. It is not to the point that terms such as “multi-unit housing” are used in the Territory Plan and that they appear in a particular context which might provide greater clarity to the purposes clause in the lease. The simple fact is that a person searching the ACT Land Titles Register to discover the purposes for which the land the subject of the Crown Lease might be used would not be made aware from the contents of the lease itself that cl 3(a) was qualified in some way by something in the Territory Plan. The High Court said in Westfield:

[5] Together with the information appearing on the relevant folio, the registration of dealings manifests the scheme of the Torrens system to provide third parties with the information necessary to comprehend the extent or state of the registered title to the land in question. … [39] … The third party who inspects the Register cannot be expected, consistently with the scheme of the Torrens system, to look further for extrinsic material which might establish facts or circumstances existing at the time of the creation of the registered dealing and placing the third party (or any court later seized of a dispute) in the situation of the grantee.

63. It was not open to the Tribunal to conclude as it did at [58] of its reasons that it was able to construe cl 3(a) of the Crown Lease by reference to the Territory Plan as one of the “surrounding circumstances”.

64. In relation to the statutory instrument issue, I am persuaded by the submissions of the Authority that insofar as the Tribunal did construe the lease on the basis that it was a statutory instrument under the Legislation Act it was wrong to do so. The history of Crown leases in the Territory, the nature of the lease as evidencing a commercial transaction and the decisions in the Defence Housing Authority case and Tang provide strong support in my view for the conclusion that a lease granted under s 237 of the PDA is not a statutory instrument under the Legislation Act. I am fortified in that opinion by the contents of the table under s 142 of the Legislation Act and the nature and width of the documents there set out to which reference may be made for the purpose of working out the meaning of a statutory instrument.

Did the Tribunal err in concluding that people who stay at units on the land must do so permanently or for a “considerable time” for the land to be used for residential or predominately residential purposes?

Decision of the Tribunal on this issue

65. If I am correct in concluding that the Tribunal made an error of law in construing the Crown lease that conclusion would be sufficient to grant the application for leave and to allow the appeal. However, in case I am wrong in that conclusion I proceed to address the second broad issue of law raised by Quanton.

66. In dealing with this issue, I assume that the Tribunal was correct in construing cl 3(a) of the Crown Lease in the light of the Territory Plan. Thus, having concluding as it did at [67] of its reasons (extracted at [26] above) the Tribunal proceeded to formulate the consequential questions arising as follows:

[69] The show cause notice relied upon three grounds: (a) Failure to comply with the Crown lease; (b) Undertaking a development for which development approval was required, either without approval or otherwise than in accordance with that approval; and (c) Constructing a building or structure without approval. [70] The third ground was not pressed at hearing. The buildings on the land have been approved as substantially in compliance with the development approval. [71] The first and second grounds are intimately connected. The Applicant’s argument is that if the Crown lease only permits residential use of the land, and the activity conducted by KFA is correctly characterised to be commercial accommodation, then the operation of KFA on the land is both a failure to comply with the Crown lease and the undertaking of a development without approval.

67. The Tribunal referred to the evidence of the use of the land and Quanton’s submissions at [73]–[75]:

[73] ... This included observations that KFA staff could take telephone bookings for one night, and that the KFA website did not permit bookings for longer than seven nights. The Applicant pointed out that KFA had a presence on third-party platforms such as Trivago. The Applicant also noted that a notional rate of 10% GST was charged for bookings. [74] The Lessee submitted that KFA offers a broad range of flexible accommodation options, described as both short and long term accommodation, catering to a variety of people such as government or private sector employees, and seasonal/transient workers such as parliamentarians and their staff. [75] The Lessee submitted that the Tribunal should be cautious to draw any conclusions about the conduct of KFA’s operations on the basis of the material provided by the Applicant. In particular the Lessee submitted longer stays than one week were encouraged and arranged through personal contact with KFA staff; that 38 ‘tenants’ had stayed for a cumulative period of between 91 and 462 days; and 15 ‘tenants’ of KFA had stayed for continuous periods of 90 days or more. Notwithstanding the use of the term ‘tenant’, there was no evidence that KFA enters into residential tenancy agreements with longer-staying guests.

68. At [77] of its reasons the Tribunal referred to the issue of whether the use by KFA amounted to using the land for “commercial accommodation units”. This term is defined in the Territory Plan as being “a room or suite of rooms available on a commercial basis.” The importance of the distinction appears from paragraph [81] where the Tribunal said:

[81] The Authority submitted that it is not clear from the Territory Plan that the concepts of ‘residential use’ and ‘commercial accommodation use’ are exclusive. We do not agree. Under the hierarchical framework of the Territory Plan the two concepts are exclusive. [82] As earlier noted, much of the parties’ submissions addressed whether the operation of KFA can be correctly described as ‘short-term’ accommodation, or ‘serviced apartments’. However, we do not think that these are the correct questions to ask. In determining whether the Crown lease is being complied with, we must ask ourselves whether the activity being conducted upon the land is or is not residential use. It would be sufficient answer to the application for a controlled activity order if the use of the land was found to be predominately residential.

69. In addressing the question of whether Quanton (referred to as “KFA” by the Tribunal) was using the land for residential purposes the Tribunal turned to the dictionary meanings and reasoned as follows:

[83] The term ‘residential’ is not defined in the Territory Plan. According to the Macquarie Dictionary the ordinary Australian English meaning of the word is: 1. Of or relating to residence or residences. 2. Adapted or used for residence: a residential district. 3. (of a hotel, etc.) catering for guests who stay permanently or for extended periods.

[84] The word ‘residence’ means: 1.The place, especially the house, in which one resides: dwelling place; dwelling. 2. A large house. 3. The act or fact of residing. 4. The time during which one resides in a place.

[85] To ‘reside’ in a place is: verb(i)(resided, residing) I. to dwell permanently or for a considerable time; have one's abode for a time: he resided in Box Hill.

Phrase 2. Reside in,

a. (of things, qualities, etc.) to abide, lie, or be present habitually in; exist or be inherent in b. to rest or be vested in, as powers, rights, etc. [86] A consideration of the ordinary meaning of the word ‘residential’ points to a degree of long-term and permanent habitation. This meaning is enhanced by the structure of the defined terms contained in the Territory Plan, under which residential use is distinct from the more transient or temporary habitation occurring in hotels, motels and serviced apartments listed under the umbrella term of commercial accommodation use.

70. At [87] the Tribunal emphasised the need for “a degree of permanence” implied by the Territory Plan for a use to be residential. It saw this conclusion as supported by the decision in Bowler v Hilda Pty Ltd [2001] FCA 342; 112 FCR 59 (Bowler).

71. Having defined “residential” in that way the Tribunal made the following factual findings:

[88] The evidence provided to the Tribunal leads us to be comfortably satisfied of the following facts: (a) KFA is a business enterprise conducted on the land by the Lessee; (b) The enterprise advertises itself as providing ‘serviced apartments’; (c) The building consists of 56 self-contained apartments; (d) One of the 56 apartments has been repurposed to operate as a reception area; (e) The building does not contain associated facilities such as a restaurant, bar or functions room; (f) The minimum length of stay of a guest is one night; (g) The maximum length of stay is not prescribed; (h) 15 guests have stayed for a continuous period of three or more months; (i) 38 guests have stayed for an interrupted, but cumulative total, of 91 – 462 days; (j) KFA does not enter into residential tenancy or occupancy agreements with guests in relation to their stay.

72. In the light of those findings the Tribunal concluded:

[89] From these facts, we are satisfied that the use of the land to operate KFA is not a residential use of the land. There is no direct evidence that any guest considered their stay to be in the nature of a more permanent living or ‘home’ arrangement, or that any stay was put on such a legal footing through the parties entering into a residential or occupancy agreement. The highest that the evidence gets is allowing an inference to be drawn, from the length of some stays, that those stays were residential in nature. There is no evidence that such stays were the predominant activity on the land in the past, or will be the predominant activity on the land in the future. [90] The evidence overwhelmingly supports the inference that KFA operates some kind of commercial accommodation enterprise, probably in the nature of serviced apartments, upon the land. The exact nature of that operation need not be determined in these proceedings. It is enough that the use is clearly not predominately residential.

73. Having reached that conclusion the Tribunal found that the use of the land was not in compliance with the Crown lease. It noted:

[92] Use of the land outside the permission granted by the Crown lease requires 34 development approval, which has not been granted and seems unlikely to be granted. 34 During the hearing the Authority confirmed that it would not grant approval for the conduct of serviced apartments on the land, as this would be a prohibited development in the relevant zone.

74. The Tribunal then turned to the question of whether it was appropriate in all of the circumstances to make a controlled activity order. As noted above at [3], the Tribunal decided that it was appropriate to make such an order.

Submissions of Quanton

75. Quanton argued that the Territory Plan did not define “residential use”. Furthermore, the “umbrella terms” in the Territory Plan do not conclusively establish that a particular “commercial” use of land is necessarily separate or distinct from a residential use, or that the two terms cannot overlap.

76. Under the Territory Plan the land here is zoned “RZ5”. Quanton referred to a range of the developments permitted in that zone, including the use of the land for a guest house, health facility, childcare centre, residential care accommodation, retirement village and multi-unit housing. It was thus clear, it was submitted, that developments in that zone were not limited to those where a person resides in a building permanently or even for a considerable or extended period.

77. Quanton accepted that a “commercial accommodation unit” as defined in the Territory Plan was a prohibited development in the RZ5 zone. However, it did not accept that the operation which it carried on in the units on the land fell within that definition. It further submitted that even if it did, that did not mean that it was not also a residential use, for the following reasons.

78. Firstly, the ordinary meaning of the word used in the lease, that is, “dwelling” connotes a place of residence or abode whether temporary or permanent. Quanton relied on the analysis in Genco at [39], [51] and [137]. It was implicit in the reasoning of Osborn JA that his Honour saw the short-term tenancies in question there as “residential”: see [109]. Moreover, his Honour did not see a justification for imposing a temporal requirement into the definition of class 2 buildings: see [111].

79. It followed that the concepts of “serviced” or “furnished” apartment and “residential use” are not mutually exclusive. Quanton argued (written submissions at [72]) that the dwellings it provided at the KFA:

a. comprise private living spaces; b. are used by the people who reside at them at any given time to the exclusion of others for various periods (whether short or longer term); and c. do not incorporate hotel or hotel-like features such as restaurants, bars, liquor licensing or constitute services (the existence of which would be relevant to whether an enterprise would constitute a "commercial accommodation unit" as defined in the Territory Plan.

80. Secondly, the reliance on Bowler was misplaced. In that case the Units Leases in question expressly distinguished between “residential” units and those to be used as “serviced apartments”. In that sense it does not establish or reinforce any general rule that such uses are mutually exclusive. Moreover, the decision in Bowler relied on the case of North Sydney Municipal Council v Sydney Serviced Apartments Pty Ltd (1990) 21 NSWLR 532 (North Sydney Council case). That case turned entirely on its own facts and the legislative context in question. It was suggested that if anything the discussion in the judgment of Mahoney J (Priestley and Handley JJ agreeing) supported the argument of Quanton rather than the contrary.

Submissions of the Authority

81. The Authority’s submissions echoed those of Quanton summarised in paragraphs [78]– [79] above. The Authority relied on the decision in Genco to argue that the determination of the actual use to which Quanton was putting the land required a more “nuanced” analysis that that carried out by the Tribunal here. It was argued that the evidence before the Tribunal was insufficient to allow it to conclude that the building on the land was being used as a class 3 building (under the BCA) rather than as a class 2 building. It was not enough to simply label the use as being for “serviced apartments”.

Consideration

82. If it is accepted that the Tribunal was entitled to consider the Crown Lease in the context of the Territory Plan it must follow that it was necessary to analyse the relevant operation of the Territory Plan to the land in question.

83. The starting point is that the table of definitions of the types of development which may be carried out (Part A) operates by reference to a logical hierarchy. The top of the logical tree is described by a number of “Umbrella Terms”. The next classification down is referred to under the heading “Development”. Under that classification appears “Sub-categories”, and under that in turn are “Some Common Terminology”. The latter category specified examples of the particular “Sub-category” or “Development” in question (hereafter I will refer to the relevant classification headings in the table in capitals).

84. There are a number of Developments defined at the beginning of the table of definitions without there being an Umbrella Term. One of these is “Apartment”. Another is “Commercial accommodation unit.” They relevantly appear as follows:

Umbrella Term Development Sub-Category Some Common Terminology

Apartment see multi- Serviced Flats unit housing apartment Home units

Commercial Serviced accommodation unit apartment see COMMERCIAL ACCOMMODATION USE

85. The Umbrella Terms which are relevant here are:

Umbrella Term Development Sub-Category Some Common Terminology

COMMERCIAL Commercial ACCOMMODATION accommodation unit means a room or suite USE does not include of rooms that is made a caravan available on a park/camping ground commercial basis for or a group or short-term organised camp accommodation. A commercial accommodation unit may comprise a dwelling but not a room or suite of rooms within a dwelling. It does not include any associated facility such as a restaurant, bar or functions room, which may be used by the occupants of the premises but, which is also available for use by non occupant members of the public. Serviced apartment means an apartment that is used as a commercial accommodation unit RESIDENTIAL USE Multi-unit housing means the use of land for more than one dwelling and includes but is not limited to dual occupancy housing Single dwelling housing means the use of land for residential purposes for a single dwelling only Serviced apartment see COMMERCIAL ACCOMMODATION USE

(Underlining added for emphasis)

86. I should indicate that in the extract from the table in [83] above I have not included a number of Developments referred to in the Territory Plan which are not directly relevant to the issues in this case. Thus, the Developments under Commercial Accommodation Use include guest house, hotel and motel amongst other. Under Residential use they include residential care accommodation, retirement village scheme and secondary residence among others.

87. Part B of the definitions section sets out a dictionary of particular terms used in the Plan. “Dwelling” is defined as having the same meaning as in the Planning and Development Regulation 2008 (ACT) (the PDR). Section 5 of the PDR is in the following terms:

5 Meaning of dwelling (1) In this regulation: dwelling— (a) means a class 1 building, or a self-contained part of a class 2 building, that— (i) includes the following that are accessible from within the building, or the self-contained part of the building: (A) at least 1 but not more than 2 kitchens; (B) at least 1 bath or shower; (C) at least 1 toilet pan; and (ii) does not have access from another building that is either a class 1 building or the self-contained part of a class 2 building; and (b) includes any ancillary parts of the building and any class 10 a buildings associated with the building. (2) In this section: kitchen does not include— (a) outdoor cooking facilities; or (b) a barbeque in an enclosed garden room.

88. As noted above, it was uncontroversial that the land in question was zoned RZ5. That zoning is headed “High density residential zone”. Under that heading are listed a number of zone objectives. These are pitched at a fairly general level. It is not necessary to set them out. I do note that a number of them refer to the desire to preserve residential amenity. Objective (d) in particular states the objective of ensuring that development is:

carefully managed so that it achieves a high standard of residential amenity, makes a positive contribution to the neighbourhood ... and does not have unreasonable negative impacts on neighbouring properties.

89. The zone development table for RZ5 contains three broad headings. These are “Exempt Development”, “Assessable Development” and “Prohibited Development”. The first two note that the development must be authorised by the lease. The first refers to single dwelling houses which are exempt developments pursuant to the PDR. It is not relevant to the circumstances here. The second notes that a development application is required which is assessable in the merit track, and, relevantly, sets out a list of such developments. These include “multi-unit housing”. The table also refers to a number of applications assessable under the impact track (which is a more rigorous process under the PDA). These include a prohibited development which is permitted under s 137 of the PDA. (I will refer to that section further below.)

90. Under “Prohibited Development” the following is stated:

Development listed below is prohibited development except where it is listed elsewhere in this development table

91. The following appear in the list of prohibited developments together with a large number of other items: "commercial accommodation unit" and "serviced apartment".

92. It is immediately apparent from the above summary that there is, in the scheme created by the Territory Plan, a clear distinction between residential multi-unit housing and the use of a building for serviced apartments. The latter is a sub-category of Commercial accommodation use. The description of Commercial accommodation unit in the Part A definition table specifically refers to the concept of “a room or suite of rooms that is made available on a commercial basis for short-term accommodation” (emphasis added).

93. It is thus clear that contrary to the submission of the parties, if the Tribunal was entitled to have regard to the Territory Plan in construing the Crown Lease it was required to consider the temporal aspect of the accommodation provided by Quanton to its customers. It is also clear that the residential use and use for serviced apartments were mutually exclusive, subject to an approval for the latter given by the Authority having regard to an application made under s 137 of the PDA and an impact track assessment. The evidence here suggested that no s 137 application had been made, and there had not been an impact track assessment.

94. The decision in Genco, as with many of the authorities relied on by the parties in this area, turned on the particular facts in that case and the legislative context. While the discussion of the distinction between class 2 and class 3 buildings is relevant, having regard to the definition of “dwelling” in cl 1(e) of the lease it is distinguishable in the context of the Territory Plan.

95. As to the argument summarised at [78] above, and the submission of the Authority that the evidence was insufficient to enable the Tribunal to find that the building was being used for serviced apartments it seems to me that these amount to challenges to the findings of fact made by the Tribunal. While it is possible that a question of law could arise if a finding of fact had no basis in the evidence at all, that was not the submission made by the parties here. Indeed, it seems to me that the Tribunal directed itself correctly in concluding that the assessment of use here was a matter of “fact and degree” (see reasons at [80]) and that it was necessary to consider the “predominant” use of the land (see [89]).

96. Having regard to the findings made by the Tribunal at [88] of its reasons (see [72] above) it was open to it, in my view, to conclude that the building on the land was being used for serviced apartments, as that term is used in the Territory Plan. It followed, having regard to the logic of the Territory Plan itself, that such a use was not a residential use and indeed was a prohibited use for land in zone RZ5.

97. It does not seem to me that the argument about Bowler takes the matter very far having regard to the above analysis. As Quanton submitted, Bowler turned very much on its own factual and legislative circumstances, as did the North Sydney Council case. I do not see the decisions in those matters as assisting Quanton here.

98. It follows that if I am wrong in relation to the first question, I would have rejected the challenge to the Tribunal’s decision in relation to the second question. I would, in those circumstances, have granted leave to appeal (having regard to the important matters of public interest raised in this matter) but dismissed the appeal.

Disposition

99. Having concluded that the Tribunal erred in its construction of the Crown Lease, and that it was not permitted to construe the Crown Lease by reference to the scheme of the Territory Plan it follows that I must grant leave to appeal, and indeed allow the appeal. In relation to the former, I am comfortably satisfied that the question of law raised by Quanton is one of public importance and that if leave was not granted Quanton would suffer significant hardship. Indeed, it seems to me that the justice of the case requires that leave be granted.

100. The situation with the cross-appeal is not straight-forward. It is not specifically addressed by the terms of s 86 of the ACAT Act.

101. The Court Procedures Rules 2006 (ACT) (CPRs) do not, so far as I could see, make provision for the situation which arose here. That is, where an application for leave to appeal was made by one party and where another party was directed to file a notice of cross-appeal by a certain date (the Court having already ordered that the application for leave and the appeal be heard together). Nor have I been able to find any authority dealing with the issue.

102. However, it seems to me that having regard to the grant of leave to appeal and the implicit acceptance of the proposed notice of appeal as a notice of appeal in the proceedings the conditional notice of cross-appeal thereby became unconditional.

103. Quanton sought orders setting aside the Tribunal’s decision, and the restoration of the Authority’s decision to refuse to make a controlled activity order.

104. The Authority, in its cross-appeal, in the alternative to the restoration of its initial decision, sought an order remitting the matter to the Tribunal for redetermination according to law. In support of that alternative order the Authority submitted as follows:

[96] The First Respondent notes that although the Tribunal was aware of Item 3 of Schedule 2 as a possible basis for making a controlled activity order (see [20], [71] and [72], it ultimately found only on a basis derived from the provisions of the Crown lease (see [91] and [92]). Note that in [92], although the Tribunal referred to undertaking a use that required approval (the language of Item 3), that finding was based on the terms of the Crown lease and not from the Plan itself. Thus, the Tribunal relied on Item 3 only insofar as the unapproved use was derived from the lease itself [97] As the Tribunal reached the wrong conclusion as to the interpretation of the Crown lease the decision must be set aside. The question is then how the Court should proceed. There are a number of options for the Court. [98] The first option after finding error is to set aside the order of the Tribunal and dismiss the application of the second respondent to the Tribunal. Such an order is reflective of the fact that the evidence is insufficient to establish a controlled activity is taking place. [99] The second option after finding error is to remit the matter for hearing again, with additional evidence to be before the Tribunal. Such an order recognises that at the time of the hearing before the Tribunal the focus of the evidence was directed at the length of stay. Genco clearly shows that to be the incorrect focus of the enquiry. [100] It is ultimately a matter for the Court as to disposition. (Footnotes omitted, emphasis original)

105. The reference to item 3 of sch 2 picks up a point made earlier in the Authority’s submissions. That is, that:

[75] First, the definition of “development” in s.7 includes “using the land or a building or structure on the land” (s.7(1)(d)). [76] Seconds, Schedule 2 (which defines a “controlled activity”) includes not only Item 1 relating to acting inconsistently with a Crown lease, but also Item 3 relating to carrying 28 out a development which requires approval, without that approval. 28 In this respect, [22] of the Tribunal’s reasons is curious. Item 3 is not confined to a use that is not permitted by the Crown lease.

106. Unfortunately, these points do highlight a lacuna in the reasoning of the Tribunal. While it seems that the sch 2 point was a live issue before the Tribunal (see eg paragraphs [6], [20], and [69]-[72] of its reasons) the ultimate decision was made by reference to the Crown Lease only.

107. As the Authority submitted the items in sch 2 specify what are “controlled activities” for the purposes of ch 11 of the PDA: see s 339. Item 3 states:

undertaking a development for which development approval is required— (a) without development approval; or (b) other than in accordance with the development approval.

108. Because the definition of “development” in s 7 of the PDA includes “(d) using the land, or a building or structure on the land” this raises the question of whether the use of the units within the building as serviced apartments, in the context of the Territory Plan, required development approval under the PDA. A positive answer to that question would have enlivened the discretion of the Tribunal to make a controlled activity order.

109. However, in answer to the suggestion that the Court could consider remitting the matter to the Tribunal for further determination according to law Quanton, in its submissions in reply, argues that on the correct analysis of the Crown Lease no development approval is required for Quanton’s use of the buildings “as multi-unit housing” (I understand that submission to comprehend the use as serviced apartments as found by the Tribunal in the context of the Territory Plan.) Furthermore, Quanton points to the position taken by the Authority before the Tribunal as supporting that of Quanton. Thus, at J[6] of its written submissions to the Tribunal the Authority said:

[6] If the Tribunal … decides that the Territory Plan should be used to assist in interpretation in this case, [the Authority] submits that, contrary to the (Australian Hotels Association) position, [Quanton's] use of the Land pursuant to the Crown Lease is not inconsistent with [the] Territory Plan.

110. Quanton also argues that while the AHA might have raised in passing the issue of compliance with the use permitted by reference to classes 1 and 2 of the BCA its substantive submissions focussed on the construction of the lease in the context of the Territory Plan.

111. Ultimately, Quanton submits that having regard to the way both the AHA and the Authority conducted the hearing before the Tribunal the Court should, in the interests of achieving finality, quash the decision of the Tribunal and dismiss the application made to it by the AHA.

112. In relation to the first point Quanton relies on s 134 of the PDA. That section relevantly provides: 134 Exempt development—authorised use (1) An authorised use of land, or a building or structure on the land, is exempt from requiring development approval. (2) However, use of the land is not exempt from requiring development approval if— (a) earthworks or other construction work is carried out on the land; and (b) the work requires development approval. (3) Also, use of the land, or a building or structure on the land, is not exempt from requiring development approval if— (a) a building or structure on the land is constructed, altered or demolished; and (b) the construction, alteration or demolition requires development approval. … (9) However, the authorised use of the land, building or structure stops being exempt from requiring development approval if the use was authorised by a lease (the affected lease) and— (a) the affected lease expires and no application is made under section 254 for a further lease; or (b) the affected lease is— (i) surrendered, other than for a lease variation or renewal; or (ii) terminated. … (11) To remove any doubt, an authorised use of a building or structure is exempt from requiring development approval if the construction of the building or structure is exempt from requiring development approval. (12) In this section: authorised use, of land, or a building or structure on the land— (a) means a use authorised by any of the following (whether expressly or by implication): (i) a lease; …

113. Aside from the factual issue potentially raised by s 134(2) in relation to the conversion of one of the units into a reception area, the application of this section begs the question of whether the Crown Lease, correctly constructed, permits the use of the units in the building on the land as serviced apartments. On that issue Quanton places particular reliance on the decision in the Genco case.

114. It seems to me that Genco is an important case in relation to the determination of whether:

(a) Quanton is using the units as serviced apartments, and

(b) such a use is permitted by the purposes clause of the lease.

115. In relation to the first of these issues it does seem to me that the decision of the Tribunal at [90] of its reasons (see [72] above) was not to the point in relation to the Crown Lease. That is because that decision was made pursuant to and in the context of the Territory Plan. I have held that in relation to the construction of the Crown Lease here there is no justification for reference to that plan. It follows that in deciding whether Quanton is using the units as serviced apartments the decision must be made by reference to the terms of the lease, including the relevant concepts picked up from the BCA. The same logic applies to the determination of issue (b).

116. Because Genco considered the relationship between BCA classes 1, 2 and 3 in the context of the alleged use of a number of apartments as serviced apartments it provides important guidance in relation to the determination of both (a) and (b). It is necessary to consider the decision in some detail.

117. The owner/manager of three self-contained apartments in a building at the Docklands in Melbourne (Mr Salter) commenced to advertise them for short term stays (2–90 days). The units were managed and booked under the business name “Docklands Executive Apartments”. The evidence disclosed that about two thirds of stays were for three nights or less. The services provided to customers were summarised as follows:

a) greeting guests on arrival; b) showing guests to their rooms; c) providing a directory for guests; d) arranging various services to be provided by third parties eg babysitting, dry-cleaning, shuttles, etc, for an additional charge, daily linen changes could be arranged; e) Wi-Fi could be provided for an extra fee; f) luggage storage; g) check in and check out times; h) car parking.

118. The greeting type services were provided from what was described as a “mobile reception desk”. It should also be noted that the case concerned the use of three apartments in a complex consisting of two 16 storey buildings containing a total of 340 apartments.

119. The apartment buildings had been constructed pursuant to a building permit for class 2 buildings. Under the Victorian building legislation occupancy permits had subsequently been issued permitting the apartments to be occupied on the basis of their classification as class 2 buildings under the BCA.

120. Some time after Mr Salter had commenced the business of Docklands Executive Apartments a building surveyor (Mr Genco), pursuant to the Building Act 1993 (Vic) issued a notice requiring him to cease using the apartments for serviced apartments, or alternatively to take certain steps necessary to convert each apartment from a Class 2 to a Class 3 apartment.

121. Mr Salter challenged the issuing of the notice in the Building Appeals Board. However, the Board upheld the notice. It concluded that by using the apartments for short stay accommodation their proper classification changed from BCA class 2 to class 3. Mr Salter applied for judicial review to the Victorian Supreme Court. Beach J allowed that application. His Honour considered that the Board had erred in its construction of class 2 so as to vitiate its decision. His Honour set aside the decision and remitted the matter for determination according to law.

122. Mr Genco applied for leave to appeal to the Victorian Court of Appeal consisting of Nettle and Osborn JJA. Leave was granted however the appeal was dismissed.

123. Nettle JA agreed with the conclusion reached by Osborn JA, although he set out his own reasoning. His Honour summarised the legislation which required a building to be used in accordance with its approved BCA classification. In that regard note should be taken of reg 112 of the Building Regulation 2006 (Vic) (Victorian Building Regulations):

112 Classification of buildings (1) For the purposes of these Regulations, buildings must be classified as set out in the BCA. (2) If there is any doubt as to the classification of a building under the BCA, the relevant building surveyor must classify the building as belonging to the class it most closely resembles.

124. His Honour set out the relevant BCA classes as follows (it can be seen that they differ slightly from the classes as picked up by the lease here and set out at [51] above):

[11] The Code then sets out a number of classes, including Classes 1, 2 and 3, as follows: Class 1:one or more buildings which in association constitute— (a) Class 1a — a single dwelling being— (i) detached house; or (ii) one of a group of two or more attached dwellings, each being a building, separated by a fire-resisting wall, including a row house, terrace house, town house or villa unit; or (b) Class 1b— (i) a boarding house, guest house, hostel or the like— (A) with a total area of all floors not exceeding 300 m2; measured over the enclosing walls of the Class 1b; and (B) in which not more than 12 persons would ordinarily be resident; or (ii) 4 or more single dwellings located on one allotment and used for short-term holiday accommodation, which are not located above or below another dwelling or another Class of building other than a private garage. Class 2: a building containing 2 or more sole-occupancy units each being a separate dwelling. Class 3: a residential building, other than a building of Class 1 or 2, which is a common place of long term or transient living for a number of unrelated persons, including— (a) a boarding house, guest house, hostel, lodging house or backpackers accommodation; or (b) a residential part of a hotel or motel; or (c) a residential part of a school; or (d) accommodation for the aged, children or people with disabilities; or (e) a residential part of a health-care building which accommodates members of staff; or (f) a residential part of a detention centre.

125. The definition of “sole-occupancy unit” was identical with that extracted in [51] above. The description of a class 3 building is also the same as that applying in the Territory as at 22 July 2015.

126. After setting out the BCA provisions Nettle JA said:

[13] The Code does not define ‘dwelling’ or ‘sole dwelling’ but, as has been seen, Classes 1a(i) and (ii) and 1b(ii) refer to a ‘single dwelling’ and ‘single dwellings’ in contradistinction to the kinds of buildings referred to in Class 1b. That implies that a ‘single dwelling’ is a place of separate living or dwelling for one person or a group of related persons, as opposed to a place of communal living for a multitude of unrelated persons. [14] Similarly, the Code does not define ‘separate dwelling’ in Class 2, but Class 2 refers to a ‘sole-occupancy unit … being a separate dwelling’ in contradistinction to the kinds of sole-occupancy units referred to in Class 3 which are not separate dwellings. That implies that a ‘sole-occupancy unit … being a separate dwelling’ is a sole occupancy unit which is adapted for use as a place of separate living or dwelling for one person or a group of related persons, as opposed to a place of communal living for a multitude of unrelated persons.

127. His Honour referred to the Board decision which turned on its view of a dwelling as a “permanent and long term residence” and its finding that Mr Salter was using the apartments in a manner “which had most of the hallmarks of a hotel”. In relation to the decision of Beach J, Nettle JA noted that the application focussed on the meaning of “dwelling” in the BCA provisions. Beach J concluded that there was no warrant for implying temporal requirements and that the Board had misconstrued the Code.

128. There were three grounds of appeal pressed in the Court of Appeal. The first was that Beach J had erred in failing to comprehend that the process of classification of buildings under the Code required an assessment of the use and risk of the building, and not just its physical structure. The second asserted that the Judge had failed to appreciate that the Board had determined that the use of the apartments most closely resembled the residential part of a hotel within the meaning of class 3(b) and therefore, pursuant to reg 112(2) fell within class 3. The third ground related to an issue of safety which is not directly relevant here.

129. As to the first of these grounds Nettle JA accepted that the use of a building may change so as to require a change of its BCA classification: see [22]–[24]. Significantly, his Honour noted:

[25] For similar reasons, if a building comprised of a number of sole-occupancy units each being a separate dwelling is in the first place properly classified as Class 2, but later all or a substantial number of the units is adapted for use as short term hotel style serviced apartment accommodation then, depending on all the facts and circumstances, it may be that each of the units so used should properly be re-classified as Class 3.

130. However, Nettle JA went on to say that it did not necessarily follow that the three apartments in question fell into class 3. That was the issue to be determined in relation to the second ground of appeal. His Honour started by turning to the language used to describe a class 2 building. His Honour said:

[27] In order to come within Class 2, a building must ‘contain’ two or more sole-occupancy units, each being a separate dwelling – in that context, I construe ‘contain’ as used in the sense of being ‘substantially comprised of two or more sole occupancy units’ each of which is a separate dwelling – and, in order to qualify as a sole-occupancy unit within the meaning of Class 2, a residential unit must be a dwelling comprised of part of a building which is set aside for occupation by one or joint owner, lessee, tenant, or other occupier to the exclusion of any other owner, lessee, tenant, or other occupier, being a dwelling.

131. After noting that the terms lessee and tenant were not apt to describe the relationship between Mr Salter and his customers his Honour said:

[30] In contrast, ‘occupier’ is a more protean term than ‘tenant’ and so, in some contexts, it may include a licensee and possibly even a squatter. It is also implicit in the juxtaposition in the definition of ‘sole occupancy unit’ of ‘occupier’ and the references to rooms of the kind delineated in paragraphs (a), (b) and (c) of the definition that occupation is conceived of as including short term stays. It follows, I think, that the patrons of Mr Salter’s serviced apartments would be occupiers within the meaning of the definition of sole occupancy unit and so, prima facie, that the apartments would fall within Class 2. [31] So to conclude, however, does not detract from the possibility already referred to that, if a building comprised of a number of sole-occupancy units, each being a separate dwelling, is adapted for use as short term hotel style serviced apartment accommodation, it may be appropriate to classify each of those units, under reg 112(2), as Class 3(b) (as the class they most closely resemble). [32] Experience suggests that there are any number of motels and not a few hotels of which the residential part is wholly comprised of self-contained sole-occupancy units each of which includes sleeping facilities, bathing facilities and rudimentary cooking facilities. With facilities of that kind, it would be possible to live in one of those units indefinitely. On one view of the matter, that is sufficient reason to classify each such unit as a sole-occupancy unit being a dwelling within the meaning of Class 2. But, if that were so, Class 3(b) would have no application to hotel and motel units of that kind. That can hardly have been the intention. Bearing in mind the evident purpose of this legislation, which is to provide for construction, fire and safety standards of buildings according to their design, construction and use, there is a strong implication that hotel and motel units of the kind in question are not within the conception of a sole-occupancy unit being a dwelling in Class 2 but rather within Class 3(b). [33] In terms of function, there is not a lot of difference between an hotel or a motel of which the residential part is comprised of self-contained units of the kind just described and a serviced apartment enterprise comprised of self-contained sole-occupancy units hired out as short-term hotel-style accommodation. Subject, therefore, to the facts and circumstances of a given case, it might well be appropriate to classify such units (pursuant to reg 112(2)) as Class 3(b) (as the class they most closely resemble). But whether or not they should be so classified is liable to depend on a range of factors including whether the apartments are of such a number and so physically disposed in relation to each other as to resemble the residential part of an hotel, and the range and nature of services provided to patrons of the apartments. I have in mind in particular the provision of common facilities such as a dining room, restaurant, swimming pool, gymnasium, laundry and business facilities. [34] So, for example, if all of the apartments in an apartment building, or all of the apartments in an identifiable section of an apartment building, are adapted for use as serviced apartments and provided with the full gamut or a substantial cross-section of the services customarily expected of a decent hotel, such as reception facilities, dining and restaurant facilities, laundry facilities, a swimming pool and gymnasium and a business centre, one might reasonably conclude that the apartments so much resemble the residential part of an hotel as properly to be classified (pursuant to reg 112(2)) as Class 3(b). Contrastingly, if there are only one or two such apartments scattered throughout a large apartment building and they are provided with but a few hotel like services and facilities of the kind I have mentioned, I should think that it would be very difficult to conceive of them as sufficiently similar to the residential part of an hotel to come within Class 3(b). Obviously, between those two extremes lies a range of possibilities. (Footnotes omitted)

132. Nettle JA then turned to the question of the BCA classification in that case. His Honour said:

[35] As will be seen from the facts set out in Osborn JA’s judgment, in this case there were only a few short term serviced apartments scattered randomly among a much larger number of units not adapted for use as serviced apartments. The services which Mr Salter provided to the patrons of the subject serviced apartments were also relatively exiguous. Essentially, they consisted of putting customers in touch with third party providers of laundry services and food and the like. Consequently, it does not seem to me that the units operated by Mr Salter much resembled the residential part of an hotel or a motel comprised of sole-occupancy units. In the end, however, that is a question of fact and degree and the Board’s decision on such a question ought not be set aside unless it appears not to have been open on the evidence or otherwise as informed by wrong principle. As matters stand, I am not persuaded that the Board’s decision was not open on the evidence.

133. As can be seen his Honour was not prepared to conclude that the Board had erred in making the finding which it had made in that case that the use of the apartments most closely resembled the residential part of a hotel. However, his Honour proceeded to deal with the question of whether Beach J had erred in his analysis of the meaning of “dwelling”. Nettle JA concluded:

[39] In the result, whatever conclusions were or were not open to the Board on the basis of the evidence before them, it seems to me that the Board were materially influenced by a misconception that a ‘dwelling’ and thus a ‘separate dwelling’ in Class 2 is essentially a place of permanent or long term residence. It follows as I see it that the Board did proceed according to wrong principle, in that they misconceived the legal significance of the fact that the subject apartments were occupied on a short term basis. That was an error of law and, on that basis, the judge was correct to remit the matter for reconsideration.

134. Osborn JA took a similar view with respect to the meaning of “dwelling” in the BCA provisions. His Honour said:

[111] There is no justification for implying conditions imposing an additional temporal requirement into the definition of Class 2. This is not a case where the word ‘dwelling’ was obviously intended to have the meaning for which the appellants contend. The conditions which must be satisfied before a Court may read words into a statutory provision to give effect to its purpose have not been met. [112] Furthermore, the implication of a limitation of the type suggested is not supported by the structure and statutory context of the classification provisions. The concepts of short term and long term use are expressly utilised in other classification provisions and in particular Class 1b(ii) and Class 3. The Class 3 definition expressly refers to both ‘long term or transient living’ but none of the references to dwelling require use for ‘long term living’. The definition of Class 1(b) expressly contemplates that in that context a dwelling may be used for short term holiday accommodation. (Footnotes omitted)

135. The consequence of this approach was, as with Nettle JA, Osborn JA considered that the fundamental basis of the Board’s finding as to the classification of the apartments was undermined. His Honour concluded:

[139] Whilst is true the Board purported to classify the use by reference to what it most closely resembled, it is plain that it was fundamental to its conclusions that it considered that ordinarily a dwelling is not a building used for short term accommodation. [140] In turn the Board misdirected itself as to a central characteristic of the comparator which it rejected as against the use of hotel. This being so it is no answer to say that the Board’s ultimate decision was one of fact and degree turning upon all the circumstances of the case. [141] The decision of the South Australian Environment Resources and Development Court in The Oaks Hotels and Resorts Pty Ltd v City of Holdfast Bay was correct insofar as it dealt with the relevance of short term stays to classification under Class 2: There is no warrant for reading into the Building Code a distinction between Class 2 and Class 3 buildings based upon length of stay. In fact, the description of a Class 3 building specifically contemplates that it may be used for long term living. In our opinion, it is clear from the classification descriptions in the Building Code quoted above that the building under consideration in this matter is a Class 2 building whether the 69 apartments in question are inhabited by their owners, rented out for short or long terms by their owners, or rented out for short or long terms by Oaks on behalf of their owners.

[142] It follows that unless the Board’s order could be justified on a basis other than its conclusion as to classification the trial judge was correct to remit the matter for rehearing. The Court’s finding as to the meaning of ‘separate dwelling’ was not dispositive of the appellants’ case on the merits because the appellants relied both on the combination of short term stays and the nature of the commercial services provided in conjunction with such stays. Accordingly, the proper course was to allow the Board to reconsider the facts of the matter in the light of the proper understanding of the Class 2 definition. (Footnotes omitted)

136. While it is true that the classification issue here does not involve a provision like reg 112 of the Victorian Building Regulations it does seem to me that the factual inquiry necessary to determine whether Quanton’s use of the units has strayed beyond that which would be comprehended by the class 2 classification picked up by the definitions in the Crown Lease has not been carried out. As in Genco, because the Tribunal misconstrued the lease the basis for its consideration of the factual issues proceeded on an incorrect basis, at least in relation to the question of whether Quanton was complying with the Crown Lease.

137. The above analysis supports the submission made by the Authority that it was open to the Court to remit the matter remitted to the Tribunal for redetermination. That redetermination might well involve the need for further evidence to clarify the operation carried on by Quanton in the building on the relevant land.

138. The powers of the Court in an appeal such as this are set out in rules 5051 and 5052 of the CPRs. Rule 5051 and the table forming part of the rule make it clear that pt 5.3 applies to appeals pursuant to s 86 of the ACAT Act. Sub-rule 5051(2) provides that pt 5.3 applies “subject to any territory law applying to the appeal”. Sub-rule 5052(1) provides:

5052 Appeals to Supreme Court— (1) For an appeal to the Supreme Court, the court— (a) has all the powers and duties of the court or tribunal that made the order appealed from; and (b) may draw inferences of fact; and (c) may, on special grounds, receive further evidence about questions of fact, either orally in court, by affidavit or in another way; and (d) may make any of the following orders: (i) an order confirming, amending or setting aside the order of the court or tribunal appealed from; (ii) an order remitting the case to be heard and decided again, either with or without the hearing of further evidence, by the court or tribunal in accordance with any direction the court considers appropriate; and (e) may make any other order that it considers appropriate.

139. It is apparent that some of the provisions of r 5052 are not appropriate for an appeal limited to a question of law. This was discussed by Penfold J in CIC Australia Ltd v ACT Planning and Land Authority [2013] ACTSC 96; 277 FLR 26. As her Honour noted at [20] the rule applies to a wide range of appeals under a range of legislative provisions. Her Honour said:

[24] The effect of the making of the CPRs in 2006 and the enactment of the ACAT Act in 2008 on the nature of the appeal from ACAT is not entirely clear. If the nature of the appeal from ACAT is to be determined by reference to the generic powers conferred on the Supreme Court by the CPRs, then the scope of an appeal from ACAT is now very broad. On the other hand, if the powers conferred on the Supreme Court are to be read subject to the ACAT Act as required by r 5051(2), then it seems to me that the ACAT Act’s restriction of appeals to those involving questions of law or fact must be given some meaning, and that the meaning to be given is appropriately found in the High Court’s approach in Osland. [25] In Osland, VCAT had powers very similar to those conferred on the ACT AAT when the Court Procedures Rules were enacted (including the catch-all power to make any other order considered appropriate), and French CJ, Gummow and Bell JJ said at [19]: The jurisdiction conferred by s 148(1) is confined to appeals on questions of law. Section 148(7) does not enlarge that jurisdiction. It confers powers on the court in aid of its exercise. [26] Hayne and Kiefel JJ made similar comments at [78]: It appears from the reasons of the Court of Appeal that counsel for Mrs Osland accepted that the Court had power to determine the question as to the application of s 50(4) for itself. The Court of Appeal referred in that regard to s 148(7)(b) of the VCAT Act, as did the Solicitor-General for Victoria on the hearing of this appeal. Section 148(7) is concerned with the orders which might be made on an appeal to the Court of Appeal under s 148(1)(a). Paragraph (b) of s 148(7) provides that the Court may make an order that the Tribunal could have made in the proceeding. The power to make such an order, or the other orders listed in s 148(7), arises only following review of the Tribunal’s decision for legal error. Section 148(7) does not operate to expand the jurisdiction given by s 148(1)(a). Although expressed in wide language, the powers given by s 148(7) are only to be exercised as a remedial consequence of dealing with an error of law. (citations omitted)

140. Her Honour concluded on this issue:

[27] Thus, despite the broad powers in relation to appeals from ACAT apparently conferred on the Supreme Court by r 5052, I consider that my task is: (a) to examine and answer questions of law that may be relevant to the ACAT decision that is challenged in this appeal; (b) as required for remedial purposes having regard to my conclusions about those questions of law, to do any of the following things: (i) to confirm, vary or set aside ACAT’s decision; (ii) to remit the case to ACAT to be heard and decided again, either with or without the hearing of further evidence, in accordance with my directions; (iii) to exercise any of the powers or duties of ACAT, including the power to receive further evidence; and (iv) to make any other order that I consider appropriate. [28] An approach of this kind would in some circumstances permit the Supreme Court to determine the issue between the parties by reference to the evidence, which may include evidence given before that court. It might on occasions permit the Supreme Court to re-exercise the power to make a discretionary decision if it found that there had been clear legal error in ACAT’s original exercise of the power to make the discretionary decision. However, I consider that the review by the Supreme Court of the exercise of discretionary powers by ACAT, or the re-exercise of such powers, should not be a routine or usual response to appeals from ACAT on questions of law.

141. I see her Honour’s comments as providing valuable guidance. It seems to me that having found that the decision of the Tribunal miscarried due to errors of law in relation to the construction of the Crown Lease, the preferable course is to remit the matter to the Tribunal to be determined according to law. It will be necessary for the Tribunal to consider all of the circumstances of Quanton’s use of the building on the subject land in light of the correct construction of the Crown Lease. The determination of whether or not Quanton is in breach of the Crown Lease may also answer the question raised under item 3, sch2 of the PDA and the effect of s 134 of the PDA. I am not persuaded that it would be appropriate in order to achieve finality to simply set aside the Tribunal’s decision and dismiss the application for review of the Authority’s initial decision. The matters raised before the Tribunal are of importance to the operation of the planning laws of the Territory. It would be most unsatisfactory for the issues which were raised by the AHA in relation to the use of the building and land in question to be left in a state of uncertainty, both for that party and the community.

142. The Authority in its written submissions addressed at some length the potential effect of s 50 of the PDA (which is set out at [30] above). However, apart from being mentioned in passing in the Tribunal’s reasons for decision, the Tribunal did not decide the issues raised in the Authority’s submissions. In the application/appeal before me Mr Walker SC, for Quanton, suggested that s 50 did not support the importing of the Territory Plan into the construction of the lease. I have not found it necessary to analyse that proposition. Nor does it seem to me to be appropriate that I express an opinion on the issues raised by the Authority in relation to the section. This is particularly so in circumstances where I propose to remit the matter to the Tribunal for redetermination.

143. At the end of oral submissions Mr Walker SC foreshadowed the possibility of an application for costs. I understood this to relate to the position of the AHA rather than the Authority. At any rate I propose to reserve costs as requested.

Orders

144. The orders of the Court are:

(1) The application for leave to appeal is granted.

(2) The proposed notice of appeal at exhibit 4 to the affidavit of Ms L Crick affirmed on 20 January 2021 is taken to be the appellant’s notice of appeal herein.

(3) The appeal and the cross-appeal are allowed.

(4) The orders of the ACT Civil and Administrative Tribunal made on 22 December 2020 are set aside.

(5) The matter is remitted to be heard and decided again by the Tribunal according to law with the hearing of such further evidence as the parties may wish to lead. (6) Costs are reserved.

I certify that the preceding one hundred and forty-four [144] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Crowe

Associate:

Date: